Since 2002, our brilliant team of lawyers has helped many business owners successfully resolve internal shareholder disputes and help protect their shareholder value. Whatever your needs, our team has it covered. Speak to one of our team for a free consultation.
Shareholder dispute solicitors
Our Shareholder disputes team regularly helps shareholders with the following:
Many businesses are set up with two individuals holding an equal amount of shares. When those two people fall out or want to take the business in different directions, the consequences can be serious. Early action to fix the situation is vital – otherwise the business can fail, and the company shares become worthless.
Our team regularly resolves deadlock situations for clients, normally by negotiation and mediation, but if required, more formal court intervention or litigation.
Disputes with management
Shareholder disputes with the management board can destabilise a company rapidly. Our team can quickly get to grips with claims ranging from failure to pay dividends, breach of director duties, abuse of director loan accounts, share dilution, issues over business strategy & direction, fraud, incompetence and much more.
When relations break down with one or more company directors, we can help the company shareholders to see whether director removal is an option. This will often depend on the powers given in the articles of association or shareholder agreement. Our team are familiar with the common law and statutory duties of a director and can advise whether a director’s conduct means that removal is possible.
Family business disputes
Shareholder disputes in a family business bring their own unique challenges. Not only is there a business to try and keep running, there is the added complexity of dealing with often difficult family situations, including succession and who gets to run a business when the current family member steps back. Our team at FWJ is well versed in dealing with these delicate family situations.
Minority shareholder disputes & unfair prejudice claim
Being a minority shareholder carries risks of exploitation by majority shareholders. For example, the majority shareholder might try to dilute your shareholding or refuse to pay out dividends.
Minority shareholders can take action to protect themselves, including bringing an unfair prejudice bringing a derivative claim, petitioning the court to winding up the company on just & equitable grounds or bringing a claim against the director in their personal capacity. At FWJ, our team can advise you on all these options.
A derivative claim is a type of legal action that a shareholder in the name of the company against directors who are in breach of their statutory or common law duties. These claims can be highly effective against directors who fail to act to the standards required by law. Our team often helps shareholders use this legal remedy to bring errant directors to account and protect the value of their shareholding.
Just & equitable winding up
A just & equitable winding up petition can be used by shareholders when there is a dispute in the company and there has been a total breakdown in trust. If there is no other solution available, the court has the power to wind the company up. Whilst it is a very extreme solution to a problem, if the company is in a deadlock situation and cannot trade, it might be the only solution available.
Non-payment of dividends & unfair payment policies
Failure to pay dividends or understating dividends is a major complaint of company shareholders. Whilst there is no legal obligation on a company to declare dividends, shareholders might, in certain circumstances, have a claim for unfair prejudice against the company for non-payment of a dividend.
Our team can help review the decision-making behind the failure to declare a dividend and advise whether it is unfairly prejudicial and out of in line with the duties that the directors have to the company.
Even if you haven’t reached a dispute stage with either the board or your fellow shareholders, it makes sense to understand what your rights are and whether they can be better protected, for example via changes to the shareholder agreement or articles of association. Many disputes can be avoided entirely with better planning. Or solved more quickly and cheaply if advance thought has been given to dispute resolution.
Business exit & share sales
Any shareholder exiting a business wants to maximise the value of their shares. Whilst this can often be straightforward, problems can occur when disputes have arisen or the exiting shareholder is a minority owner of shares. Our team can help ensure that you receive proper value for your shares and help stop attempts by the majority shareholders to dilute or minimise the value of your shares.
Company Insolvency problems
Shareholder value can be put at risk if the company is facing insolvency issues. If it is clear that the company’s managers are taking the company on a path towards insolvency, there are steps you can take to prevent further damage to the business. Our team can help you with this and if possible, avoid formal insolvency of the company and making your shares worthless.
Legal costs and funding your shareholder claim
People rightly ask how any shareholder claim can be funded. Our team have decades’ experience dealing with shareholder claims and finding the right funding option for any client. It could be the company itself will pay the fees via a derivative action. Alternatively, we can explore fixed fee arrangements with you or some form of deferred fee arrangement – such as a contingency fee or conditional fee arrangement. We can also look to obtain insurance for you to pay the other sides legal costs.
Whatever your needs, our team is here to help. Call us today and we can assist.
Francis Wilks & Jones were responsive, available at all times to deal with any of my queries and very reassuring. I would definitely recommend them to deal with proceedings brought on behalf of shareholders – they understood our practical needs.A shareholder we helped bring unfair prejudice proceedings against a fellow shareholder who had been interfering with the management of the company and damaging its value